judgment DISTRICT COURT OF THE HAGUE Team commercial – interim measures judge case number / case list number: C/09/470109 / KG ZA 14-870 Judgment in summary proceedings of 24 October 2014 – extract with application of Article 28 (2) CCP in the matter of 1. the company under foreign law ZTE CORPORATION, established in Shenzhen, Guangdong, People’s Republic of China, 2. the company under foreign law ZTE DEUTSCHLAND GMBH, established in Düsseldorf, Germany, 3. the private company with limited liability ZTE NETHERLANDS B.V., established in The Hague, plaintiffs, attorney: mr. R. Hermans in Amsterdam, versus the company under foreign law VRINGO INFRASTRUCTURE INC., established in New York, New York, United States of America, defendant, attorney: mr. B.J. van den Broek in Amsterdam. Parties will hereafter be referred to as ZTE China, ZTE DE, ZTE NL and Vringo. Plaintiffs will also be referred to collectively as ZTE. For ZTE, the proceedings were also handled by mr. R.E. Ebbink and mr. H.J. Pot, attorneys in Amsterdam, and the patent attorney ir.mr. F.A.T. van Looijengoed. For Vringo, the case was also substantively handled by mr. F.W.E. Eijsvogels and mr. R. van Kleeff, who are also attorneys in Amsterdam. 1. The proceedings 1.1. The course of the proceedings appears from:

- the writ of summons dated 24 July 2014; - Exhibits 1 through 28 of ZTE; - ZTE’s overview of costs of the proceedings; - the statement of defense in summary proceedings, also deed containing

submission of exhibits, with exhibits 1 through 29 and an overview of costs of the proceedings (exhibit 30);

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- the letter from Vringo’s attorney dated 19 August 2014; - the statement of reply in summary proceedings, with exhibits 29, 30 and 33

through 40 (exhibit 35 has been cancelled) and the Motorola decision submitted by ZTE that is further discussed below;

- the exhibits 31 and 32 of ZTE; - the letter from ZTE’s attorney dated 2 September 2014; - the letter from Vringo’s attorney dated 7 September 2014; - the exhibit 31 of Vringo; - the oral hearing of 16 September 2014; - ZTE’s written pleadings; - Vringo’s written pleadings.

1.2. ZTE requested to order that the oral hearing would be held behind closed doors if and in as far as the contents of its exhibits 31 and 32 were to be discussed at the hearing. In the event that the hearing would not be held behind closed doors, by virtue of Article 28 (2) of the Dutch Code of Civil Procedure (DCCP) and Article 29 (1)(b) DCCP, respectively, ZTE further requested to order that third parties will only be provided an extract of the judgment in which any information regarding the contents of these exhibits is edited or omitted and to order that the parties are not permitted to make any statements to third parties regarding the content of these exhibits. Vringo concurred with this request. Before the oral hearing, the interim measures judge had the parties notified that exhibits 31 and 32 of ZTE would be treated confidentially as requested. The sections of the judgment that have been omitted in the extract from the judgment are indicated between square brackets. 1.3. During the oral hearing, the parties indicated that all persons present were associated with one of the parties and that, consequently, there was no need to hear the case behind closed doors. The request to only provide a copy of or extract from the judgment that is rendered anonymous in as far as necessary to guarantee the confidentiality of exhibits 31 and 32 of ZTE was maintained. 1.4. In turn, Vringo requested that its exhibit 13 as well as paragraphs 17, 18 and 42 of the statement of defense, which refer to this exhibit, be treated confidentially. This request was rejected. 1.5. The judgment in these summary proceedings was scheduled for today. 2. The facts 2.1. Nokia Corporation, at least Nokia Mobile Phones Ltd (hereinafter: “Nokia”) was the holder of a number of patents, including European patent EP 1 186 119 B2 (hereinafter also: EP 119 or the patent) for a “method for transmitting a sequence of symbols”, granted pursuant to an application of 6 July 2000, invoking the priority date of 9 July 1999. EP 119 was granted on 19 May 2004 and is in force in inter alia the Netherlands and Germany. 2.2. The (original) English text of the claims of EP 119 reads (after the patent was maintained in amended form) as follows:

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2.3. The unchallenged Dutch translation of the claims reads (after the patent was maintained in amended form) as follows:

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2.4. Qualcomm Incorporated filed opposition against the patent. On appeal in opposition, in its decision dated 11 October 2007, the Technical Board of Appeal maintained the patent in amended form. 2.5. The European Telecommunications Standards Institute (hereinafter: “ETSI”) is involved in the setting of standards in the area of telecommunications. ETSI requires that participants in the development of the standard commit themselves to reporting their standard essential patents (patents that pertain to technology that is part of the envisaged standard, also referred to by the abbreviation SEP) to ETSI and to licensing those to users of the standard under terms and conditions that are Fair, Reasonable and Non-Discriminatory (FRAND). 2.6. In December 2001, Nokia reported the patent to ETSI as essential for the UMTS standard and declared that it was willing to grant a license under FRAND terms and conditions. 2.7. Since 2002, ZTE China is involved in the design, production and distribution of telecommunication products. ZTE NL and ZTE DE are subsidiaries that are involved in the marketing of telecommunication products in the Netherlands and Germany, respectively. 2.8. ZTE inter alia markets baseband units of the type ZXSDR B8200 GU 360 (hereinafter: B8200) and remote radio units of the type ZXSDR R8880A (hereinafter: R8880A). B8200s and R8880As are designed for installation into a UMTS base station for mobile telecommunications of the type ZXSDR BS8700 (hereinafter: BS8700). ZTE has been marketing these units in the Netherlands since 2011 as it has declared during the hearing. 2.9. In 2003, Nokia sent a draft license agreement with respect to essential patents held by it to ZTE China. It repeatedly requested ZTE China to enter into negotiations regarding the conclusion of a license agreement. 2.10. On 26 March 2007, Nokia wrote ZTE China as follows:

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2.11. In August 2012, Vringo acquired approximately 500 patents from Nokia, including EP 119. 2.12. In a letter dated 25 September 2012, Vringo notified ZTE China that it had acquired a number of essential patents for the UMTS standard and invited ZTE China to take out a FRAND license under its essential patents and to make a proposal to this end. 2.13. From 2012, Vringo furthermore initiated infringement proceedings against enterprises that are part of the ZTE group in amongst others England, Germany, Spain, France, Brazil and India. 2.14. In a letter dated 28 March 2013, Vringo sent ZTE China and affiliated enterprises a concrete proposal to conclude a license agreement for its portfolio of essential patents, including EP 119, for all countries in which those patents are in force, by sending a ‘term sheet’. Vringo inter alia wrote the following therein (to ZTE’s attorney):

C/09/470109 / KG ZA 14-870 8 24 October 2014 2.15. In a letter dated 18 April 2013, ZTE China informed Vringo that it was interested in reaching agreement about a license agreement under FRAND terms and conditions and asked additional questions. It did not make any counterproposal, nor did it indicate that it did not regard the proposal of Vringo as FRAND. 2.16. On 3 May 2013, Vringo sent a response to the letter of ZTE China of 18 April 2013 with answers to the questions asked. It further wrote:

Vringo did not receive any response to this. 2.17. In June 2013, Vringo proposed to ZTE China to request the English court as independent arbitral tribunal to set the FRAND terms and conditions for a license under Vringo’s essential patents. ZTE China did not respond to this proposal. 2.18. In December 2013, during a meeting in China, Vringo again made a proposal for a license agreement. 2.19. In a judgment of 17 December 2013 in proceedings between Vringo as plaintiff and ZTE China and ZTE DE as defendants, the Landgericht Mannheim ruled that the marketing of (inter alia) the BS8700 in Germany indirectly infringes claim 1 of EP 119. An infringement injunction was imposed on ZTE China and ZTE DE. After a provisional assessment of the validity of the patent, the German court did not see any reason to stay the proceedings until the decision in the invalidity proceedings filed, because it estimated the chance of revocation to be insufficiently high (‘Dass der Erfolg der Nichtigkeitsklage wahrscheinlicher wäre als deren Misserfolg, kann die Kammer vorliegend nicht feststellen‘). Nor did the court see any reason to stay the proceedings in anticipation of the answers to questions for a preliminary ruling with respect to the FRAND problems by the Court of Justice of the European Union, because the position of ZTE was in any event considered to be not FRAND. The request of ZTE to suspend the enforcement of this judgment was rejected in a decision of the Oberlandesgericht Karlsruhe of 19 February 2014.

C/09/470109 / KG ZA 14-870 9 24 October 2014 2.20. At the end of 2013, Vringo requested Dutch customs to act on the basis of EP 119 by virtue of Regulation 608/2013 of 12 June 2013 (hereinafter: “the APR”). 2.21. On 29 April 2014, customs in Rotterdam detained a shipment of 20 B8200s and 60 R8880As (hereinafter collectively referred to as: “the UMTS goods”). The UMTS goods originated from ZTE China and are destined for the company E-Plus in Germany, an operator of mobile networks. The UMTS goods are meant to be installed in the BS8700 base station. In addition, on 16, 23 and 28 May 2014, other goods of ZTE were detained (hereinafter: “the LTE goods”). 2.22. On 21 May 2014, with leave from the interim measures judge of the District Court of Rotterdam, Vringo served a garnishee order for the purpose of surrender of the UMTS goods based on the statement that the UMTS goods directly infringe claims 12, 13 and 15 and indirectly infringe claims 1 through 5, 7, 10 and 11 of EP 119 or threaten to do so in the Netherlands and Germany, at least that ZTE unlawfully facilitates the infringement. The LTE-goods were released by Vringo on 17 June 2014. 2.23. On 28 May 2014, Vringo initiated proceedings on the merits with this District Court against (amongst others) and moved that ZTE is ordered to surrender the UMTS goods for destruction, at least that ZTE is ordered to suffer and tolerate the surrender and destruction thereof. Its claims are based on the alleged infringement of both the Dutch part and the German part of EP 119. 2.24 In a letter dated 18 June 2014, Vringo […] proposed to ZTE China […] 2.25. […] 2.26. On 19 August 2014, ZTE responded to Vringo’s proposal of 18 June 2014 with a counterproposal. 3. The dispute 3.1. ZTE claims, in brief: principally:

(I) to lift the attachment of the ZTE goods1; (II) to prohibit Vringo by virtue of the APR from making any further requests to the

Dutch customs authorities to detain ZTE goods on the basis of patents that have been declared to be standard essential, at least on the basis of EP 119;

(III) to prohibit Vringo from having any further attachments levied against ZTE goods to the extent that the leave for such attachment is based on the alleged infringement of any patent that has been declared to be standard essential, at least on alleged infringement of EP 119;

(IV) to order Vringo to inform customs that it withdraws the application with respect to the goods of ZTE filed on the basis of the APR;

1 ZTE does not provide a definition of this term, but in view of its position in the written pleadings under 72 that the claims can in any event be awarded in respect of the LTE goods, the interim measures judge assumes that with this term, ZTE refers to both the UMTS goods and the LTE goods.

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(V) each time subject to a penalty; alternatively: (VI) to declare that the attachment of the ZTE goods is lifted subject to the

condition that ZTE furnishes financial security to Vringo as described in the summons;

(VII) to render the prohibitions under II, III and IV subject to the condition that ZTE furnishes similar financial security to Vringo with regard to any future goods to be imported;

(VIII) all this subject to a penalty; principally and alternatively: (IX) to order Vringo to pay the costs of the proceedings estimated in accordance

with Article 1019h DCCP (X) to declare the judgment provisionally enforceable notwithstanding appeal.

3.2. In brief, ZTE bases its claims on the following. 3.2.1. To the extent necessary, ZTE is willing to take out a license under Vringo’s essential patents, including EP 119, under FRAND terms and conditions. […] 3.2.2. Under these circumstances, in detaining the ZTE goods (both the shipments at issue and future shipments) and in taking the subsequent attachment measures, Vringo acts in breach of European competition law and thus unlawfully in respect of ZTE, because it abuses its dominant position as holder of an essential patent. In this context, ZTE refers to the decisions of the European Commission of 29 April 2014 in the cases AT.39985 (Motorola) and AT.39939 (Samsung). According to these decisions, the holder of an essential patent can only demand an infringement prohibition against an unwilling licensee. However, ZTE cannot not be qualified as an unwilling licensee. […] 3.2.3. Vringo’s offer of 28 March 2013 is in breach of its FRAND obligation, because it comprises payment for patents that might not be essential or valid and/or which are not being infringed. 3.2.4. As a result of Vringo’s (Nokia’s) FRAND declaration as meant above in 2.6, it should moreover be assumed that ZTE already has a license. 3.2.5. The legal measures of Vringo against ZTE are unlawful and in breach of pre-contractual good faith, given that it is in fact forcing ZTE therewith to consent to conclude a license agreement under terms and conditions that are unilaterally set by Vringo. The initiation of infringement proceedings shortly after Vringo had informed ZTE of its acquisition of Nokia’s patent portfolio indicates that Vringo is not willing, as it is required to do, to negotiate a license in good faith. 3.2.6. The products of ZTE do not fall under the scope of protection of EP 119. 3.2.7. Moreover, there is a serious, non-negligible chance that EP 119 will be revoked in proceedings on the merits. 3.2.8. After all, claims 1, 12 and 13 lack novelty in light of 3GPP Technical Specification 125.211 (hereinafter: TS 25.211 V2.1.0) that is part of the state of the art,

C/09/470109 / KG ZA 14-870 11 24 October 2014 as well as in light of an article by M. Raitola et al. entitled Transmission Diversity in Wideband CDMA (hereinafter: Raitola). 3.2.9. In any event, claims 1, 12 and 13 of the patent are not inventive starting from document TSGR1#5(99)6772 (and TS 25.211 V2.1.0) as the closest state of the art or starting from Raitola. For similar reasons, even assuming that ZTE applies the patent, ZTE cannot be prohibited from using an application that in light of the state of the art lacks novelty or inventive step (Gillette defense). 3.2.10. In the Netherlands, It is not possible to issue a garnishee order for the purpose of surrender on account of infringement of a foreign patent. The fact is that it is not possible to commit any reserved acts in the Netherlands in respect of a patent that is not in force in the Netherlands. 3.2.11. Even if it would be held that the ZTE goods infringe EP 119, the claim for the destruction of the ZTE goods will not be awarded in proceedings on the merit, because that measure would be disproportionate and Vringo does not have any legitimate interest in such a measure. In view of this, as well, the right invoked by Vringo is defective. 3.2.12. Finally, a balancing of the interests of the parties should lead to the lifting of the attachment of the ZTE goods. ZTE is suffering disproportionate financial and reputation damage as a result of the attachment. The interest of Vringo is minor, because it does not produce or sell any competing goods. 3.2.13. Because Vringo is required to grant a license under EP 119, it is only entitled to a license fee. Alternatively, ZTE is prepared to furnish security for the license fee ZTE might possibly owe Vringo for the attached goods and any goods that may eventually be supplied in the future. The amount that corresponds to the license fee according to the proposal of Vringo from 2013 is on the third party account of the attorney of ZTE. Article 24(2)(a) of the APR stipulates that the goods must be released if the holder of the goods has provided a sufficient guarantee. 3.3. Vringo has disputed the claim with arguments. In as far as relevant, the arguments of the parties are addressed in more detail below.

4. The assessment jurisdiction 4.1. Leaving aside other grounds, the interim measures judge already has international jurisdiction over the claims on the basis of Article 4 of Council Regulation (EC) No 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (hereinafter: EEX-Reg) in conjunction with Article 9 (a) DCCP, given that Vringo is domiciled outside the European Union and appeared without contesting the jurisdiction. To the extent that the validity of the Dutch and German part of EP 119 is called into question,

2 A proposal to amend the UMTS standard dated 1-4 June 1999.

C/09/470109 / KG ZA 14-870 12 24 October 2014 the jurisdiction to grant provisional measures is based on Article 22 (4) EEX-Reg and Article 31 EEX-Reg, respectively. 4.2. To the extent that relative jurisdiction does not follow from Article 80 (2) of the Dutch Patents Act 1995 (Rijksoctrooiwet 1995), relative jurisdiction exists given that this has not been contested, either. urgent interest 4.3. The urgent interest in the claim to lift the attachment on the UMTS goods results from the continuation of the attachment that was wrongfully made according to ZTE. The urgent interest in the claims to prohibit Vringo from requesting the customs authorities to detain goods that fall under the scope of essential patents and to seize these goods exists in view of the claimed constant threat that Vringo will proceed with this act that is unlawful according to ZTE. The FRAND obligation of Vringo 4.4. What is stated in 3.2.1 through 3.2.5 consistently pertains to the FRAND obligation which, as Vringo did not contest, now falls on Vringo as a result of the acquisition of the patents of Nokia. 4.5. According to Article 705 (2) DCCP, the attachment levied by Vringo must inter alia be lifted in the event that prima facie evidence demonstrates that the right invoked by Vringo is unsound. 4.6. As this District Court decided in its judgment of 17 March 2010 (Philips - SK Kassetten), the mere existence of an obligation to grant a FRAND license does not imply that a holder of an essential patent can no longer enforce his patent right. This does not constitute abuse of a dominant economic position, or an unlawful or unreasonable act, except in the event of special circumstances.3 The argument of ZTE that it must be assumed that it has a license on the basis of Vringo’s FRAND obligation alone fails on the basis of this case law.

4.7. In the cited decision it is recognized that under certain circumstances, there may be abuse of a dominant economic position that prevents exercise of the patent right. However, the Motorola decision4 that ZTE cited at length does as yet not lead to the conclusion that this is the case in the case at issue. Leaving aside the importance of this decision for the case at issue – Vringo rightfully contests that the judge is formally bound by this decision in the proceedings at issue as alleged by ZTE – Vringo also rightfully points out that the circumstances discussed by the Commission substantially differ from those in the case at issue.

4.8. In the decision it is found that the holder of an essential patent for which a FRAND obligation has been entered into can nevertheless enforce the patent in respect of a potential licensee who is unwilling to enter into a license agreement under FRAND terms and conditions,

3 Compare also District Court of The Hague 14 March 2012 (Samsung - Apple). 4 ZTE also mentions the Samsung decision but in its argument it referred virtually exclusively to the Motorola decision.

C/09/470109 / KG ZA 14-870 13 24 October 2014 but that Apple cannot be designated as unwilling as of its Second Orange Book Offer discussed in the decision. As the interim measures judge understands, this offer inter alia comprised: - a license agreement to be concluded directly and payment of a running royalty, the amount of which would initially be determined by Motorola subject to its FRAND obligation; - however, Apple has the right to have the amount of the license be determined with retroactive effect by the competent court. To comply with the conditions to be stipulated for the offer by the potential licensee according to the Orange Book decision of the BGH, payment was apparently to be made into an escrow account.5 4.9. On the other hand, ZTE’s offer dated 19 August 2014 that is currently on the table […]. This is a proposal that indeed deviates substantially from the case assessed by the Commission […] At the least, it can be doubted whether this offer will turn ZTE into a willing licensee. In any event, the German judge in proceedings on the merit did not accept this,6 nor does the interim measures judge find this for the present. In any event, it cannot be held that it is so likely that the defense will be accepted in the proceedings on the merit that this should lead to the attachment being lifted. 4.10. The fact that the offer of Vringo of 28 March 2013 would allegedly be in breach of its FRAND obligation does not shed any different light on the case. If that is the case, it could have been expected from ZTE to inform Vringo of this, specifying the reasons. However, it has never done so prior to the attachment. Thus, this cannot be a reason to assume that Vringo was not actually prepared to grant a license under FRAND terms and conditions.7 Nor can it be assumed that the legal measures that Vringo took force ZTE to consent to concluding a license agreement under terms and conditions that Vringo unilaterally determined. The measures of Vringo are not a reaction to an offer from ZTE that is unacceptable for it, but to the failure to make any offer or counteroffer on the part of ZTE. The last is ZTE’s good right and this position is apparently inspired by the conviction that the patent or the alleged infringement cannot hold, but it cannot subsequently complain that Vringo is trying to enforce its patent right. Technical background of EP 119 4.11. The following, summarized, explanation of the technical background of EP 119 has been derived from the summons and the application for attachment and is not in dispute between the parties. 4.11.1. The patent regards the transmission of signals in a wireless network from a base station to a mobile station, for example a mobile telephone in a UMTS network.

5 Compare footnote 145 on page 32 and number 165 of the decision. 6 Compare pages 37 and 38 of the decision of the Landgericht Mannheim. 7 That Vringo was allegedly not prepared to do so is, for that matter, not very obvious,, given that it is in fact attempting to exploit the patent solely by obtaining license income.

C/09/470109 / KG ZA 14-870 14 24 October 2014 4.11.2. The transmission takes place over different channels, including the synchronization channel (hereinafter: SCH). This channel carries control information that is used to decode the received signal. 4.11.3. The transmission is divided into so-called frames (represented by 211 in figure 3 below), which in turn are divided into timeslots (represented by 210). The information on the SCH is transmitted in the form of synchronization symbols (represented by 302 and 303) at the beginning of each timeslot. 4.11.4. The base station can use multiple antennas for the transmission, in which case transmit diversity is involved. This improves the rate and/or quality of the transmission. In figure 3 below from the patent two antennas are used, indicated as TX1 and TX2.

4.11.5. If time shared transmit diversity (TSTD) is applied, the synchronization symbols are transmitted on the SCH by TX1 and TX2 in an alternating pattern. 4.11.6. For the quality of the signal it is important that the mobile station can determine which antenna transmitted the synchronization symbol. In the event of an odd number of slots in a frame, this gives rise to the problem that the mobile station is unable to determine from which antenna the symbol originates because this is not the same for each frame if an alternating pattern is followed. This problem does not occur if the number of slots is an even numbers. ZTE clarified the problem with the figure below for an odd number of slots:

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4.11.7. The objective of the patent is: ‘to provide a versatile method for transmitting a sequence of symbols using two antennas. A further object of the invention is that the method enables to determine unambiguously from which antenna a symbol belonging to (“the” must apparently be read here; interim measures judge) sequence is transmitted.’ (column 5, paragraph 22). 4.12. ZTE has broken down claim 1 of the patent in the following features: 1. A method (300, 400, 500) for transmitting a certain sequence of symbols, where 1.1 a frame is constructed of a certain number of consecutive symbols,

1.2 the symbols belonging to the sequence are transmitted (404, 502, 606) using two antennas, and 1.3 the transmission of the sequence of symbols is characterized (401, 601) with a certain transmission pattern, characterized in that 2. the transmission of the sequence of symbols is started (402) from a predefined antenna, 3. each symbol of the sequence is transmitted using not more than one of said two antennas, whereby only one antenna is transmitting at a time, and 4. when a partial transmission pattern is used in the end of a frame, the transmission pattern is started (403, 405) from the beginning in the beginning of a next frame.

These features will be maintained below. novelty 4.13. Even though ZTE does not say so in so many words, the interim measures judge assumes and Vringo apparently also understood that if claim 1 lacks novelty, the same is true for claims 12 and 13. 4.14. ZTE believes that all features of claim 1 are disclosed in the figures from TS 25.211 V2.1.0 included below.

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4.15. ZTE acknowledges itself that as a result of the even number (16) of slots in a frame, the pattern in TS 25.211 V2.1.0 in the next frame always begins with antenna 1. According to ZTE, the skilled person will nevertheless directly and unambiguously infer from this publication that if the number of slots is reduced to 158, the first timeslot (symbol) must still always be transmitted by antenna 1, because it would be disclosed to the skilled person that the first timeslot is always transmitted by antenna 1. 4.16. This argument cannot be followed for the present. TS 25.211 V2.1.0 does not involve a partial transmission pattern (feature 4); thus, it cannot be inferred from this, let alone clearly and unambiguously, what should apply if a partial transmission pattern is applied. Vringo argued this extensively and convincingly with arguments. The interim measures judge agrees with that argument. The argument was also

8 As proposed for a later version of the standard. See below.

C/09/470109 / KG ZA 14-870 17 24 October 2014 endorsed by the German judge in proceedings on the merit in his estimation of the chance of success in the invalidity proceedings. Given that the attachment was in part levied to secure the right to surrender the goods on account of infringement of the German part of the patent, the latter fact alone is already decisive for not lifting the attachment based on the lack of novelty discussed here. 4.17. Raitola, the document that ZTE subsequently invokes, inter alia discusses application of TSTD in Wideband CDMA systems. The article includes the following passages (emphasis added by the interim measures judge):

4.18. ZTE infers the Raitola rule from this, meaning that symbols in even timeslots are always transmitted by one antenna, while symbols in odd timeslots are always transmitted by the other antenna. It points out that Raitola does not disclose the number of slots in a frame, but that in the event of an odd number of slots, the Raitola rule results in a partial transmission pattern at the end of the frame, after which the transmission pattern starts again in the next frame, so that feature 4 (in addition to the other features of claim 1) is disclosed by Raitola. 4.19. For the present, this argument is not convincing, either. In any event, Raitola does not clearly and unambiguously disclose how to act in the event that a partial transmission pattern is involved. To the extent that ZTE wants to argue that in reproducing Raitola, the skilled person would inevitably apply feature 4 (and the other features of claim 1), this must be dismissed for the present, as well. After all, Raitola discusses

C/09/470109 / KG ZA 14-870 18 24 October 2014 the application of TSTD in a Wideband CDMA system and ZTE does not refute the substantiated argument of Vringo that such a system (at least the system that Raitola refers to) has 16 slots per frame. When working Raitola, the skilled person would thus not come up against a partial transmission pattern. inventiveness 4.20. ZTE’s attack of the inventiveness of claims 1, 12 and 13 of the patent can be summarized as follows. 4.20.1. In TSGR1#5(99)677 it is suggested to reduce the number of slots from 16 to 15 to harmonize the UMTS standard with the CDMA2000 standard. Shortly afterwards, one of the members of the working group that develops the standard noted that ‘TSTD of SCH is also affected by the 15-slot structure. SCH transmission starts from a different antenna between even and odd frames’. Subsequently, another member of the working group offered to write a text proposal for this problem. This demonstrates that the problem, for which the patent provides a solution, was already recognized. 4.20.2. TSGR1#5(99)677 must be considered as the closest state of the art, or at least a combination of TSGR1#5(99)677 and TS 25.211 V2.1.0, the latter document is part of the general professional knowledge of the skilled person. The distinctive feature of EP 119 is feature 4. The technical effect of this measure is that the mobile handset knows from which antenna a specific symbol is transmitted. 4.20.3. The technical problem that is resolved can be formulated as: in using a partial transmission pattern, how can the handset determine unambiguously from which antenna a specific symbol is transmitted? 4.20.4. To resolve this problem, still according to ZTE, there are only two possibilities (shown below) that are both obvious for the skilled person:

4.20.5. In the first solution, frame 2 also begins with antenna 1, even though frame 1 ends with antenna 1. In the second solution, the antenna hopping (the alternating transmission pattern) is continued with the statement that each odd frame begins with antenna 1 and each even frame with antenna 2. Both solutions are obvious for the skilled person. The choice of one of these obvious solutions cannot be inventive.

C/09/470109 / KG ZA 14-870 19 24 October 2014 4.20.6. Moreover, when reading Raitola on the priority date, the skilled person would realize that the Raitola rule for an odd number of timeslots would mean the same as feature 4, because at that time, TSGR1#5(99)677 was publicly accessible. 4.21. For the present, this attack on the patent cannot be followed, either. 4.22. First of all, the question arises regarding whether TSGR1#5(99)677 is a realistic starting point when the skilled person is confronted with the problem specified in the patent. Vringo rightfully points out that this document discusses problems that are related to the envisaged harmonization with the CDMA2000 standard, but does not involve TSTD on SCH in this. 4.23. Likewise it can certainly be called into question whether the skilled person would indeed only see two possibilities for resolving the problem and whether it should be assumed that these are both obvious. In this connection, it is especially relevant that the Technical Board of Appeal held that the average skilled person, starting from a frame with an odd number of slots, might also contemplate completely different solutions, of which the Board mentions three by way of example.9 A convincing substantiation of ZTE why this opinion is allegedly incorrect is lacking. In the scope of the summary review of these summary proceedings to lift an attachment, this circumstance is already decisive. 4.24. Starting from Raitola, the inventive step attack is even less convincing given that ZTE even fails to explain why the average skilled person would consult TSGR1#5(99)677. 4.25. In view of the above, the outcome of this discussion in the proceedings on the merit is too uncertain to find that the attachment should already be lifted now. The Gillette defense cannot lead to this, either. infringement 4.26. According to Vringo, ZTE applied the TSTD functionality patented under EP 119 in the ZTE goods. To this end, it referred to product descriptions of ZTE, which Vringo believes demonstrate that the ZTE goods support transmission diversity. 4.27. ZTE contended against this that the UMTS standard recognizes three types of transmit diversity, only one of which is covered by EP 119, i.e. TSTD on the SCH channel in Open Loop Mode. According to ZTE, this is an optional function that its customers do not use and which is not implemented in the ZTE goods. The reference in the documentation that transmit diversity is supported allegedly pertains to a different type of transmit diversity. To substantiate this, ZTE submitted a report by the expert David Cooper, who observes that it was not possible to activate any TSTD or other transmit diversity functionality on the ZXSDR 8700 NodeB equipment that ZTE had made available to him.

9 Compare the decision under 3.11 and following.

C/09/470109 / KG ZA 14-870 20 24 October 2014 4.28. For the present, this defense cannot be accepted, either. Vringo rightfully points out that it is not very likely that if the functionality would not comprise all three types of transmit diversity described by the standard but would be limited to specific types, this would not be explicitly mentioned in the documentation. The latter is not demonstrated. On the contrary, Vringo refers to its exhibits 28 and 29: ZTE documents that allegedly explicitly demonstrate that the transmit diversity functionality pertains to all types described by the standard. These documents cannot be included in the review because it is not demonstrated that these relate to the ZTE goods. This does not alter the fact that there is nothing that demonstrates that the functionality of the ZTE goods is limited as referred to above. Accordingly, for the present it must be assumed that all types of transmit diversity are supported. 4.29. The report submitted by ZTE does not alter this. The expert did not examine the seized ZTE goods while, as ZTE confirmed at the hearing, the functionality can simply be changed in the software. Reasons why the seized goods were not examined have not become apparent at the hearing. In any event, it has not been demonstrated that ZTE requested Vringo to cooperate in such an investigation or that Vringo refused to do so. It stands to reason that such an investigation is yet to be conducted. 4.30. Moreover, ZTE does not contest the argument set out in the application to obtain leave for attachment that ZTE also indirectly infringes the method claims. Even if the ZTE goods do not implement the TSTD functionality of EP 119, it is not simply clear that no indirect infringement is involved in that case, as well. There is no substantiation on this point from ZTE. Here, as well, there is insufficient reason to assume following a summary review that the alleged infringement of EP 119 is incorrect. infringement of the German part of EP 119 by actions in the Netherlands 4.31. According to ZTE, attachment for the purpose of surrender in the Netherlands based on a foreign patent is not possible, because that patent is not effective in the Netherlands and thus no reserved acts can be committed in the Netherlands, either. 4.32. This argument assumes that under German law, an act that the German part of EP 119 reserves for the patent holder can never be committed outside Germany. Any substantiation for that argument is lacking. Moreover, it cannot lead to the attachment being lifted, because the attachment has also been levied based on infringement of the Dutch part. Allowability of the claim to surrender for the purpose of destruction in proceedings on the merit 4.33. According to ZTE, even if infringement of a valid patent is found in the proceedings on the merit, the court in proceedings on the merit will not award the claim to surrender the goods, because expensive goods are involved that can simply be modified so that they become non-infringing products (by modifying the software). ZTE refers to the Dutch Patent Act 1995 and to Dutch case law. 4.34. ZTE may be successful with this defense in the proceedings on the merit, but this is far from certain. Moreover, the attachment was levied in part based on infringement of the German part of the patent, so that as the situation arises the claim for destruction will have to be assessed under German law.

C/09/470109 / KG ZA 14-870 21 24 October 2014 ZTE did not express any opinion regarding the outcome of that assessment. Balancing the interests of the parties 4.35. Balancing the interests of the parties should not lead to the attachment being lifted. In and of itself it is likely that ZTE may suffer damage as a result of the attachment, which it can, however, recover from Vringo if it is put in the right in the proceedings on the merit. This is intrinsic to the Dutch system of prejudgment attachment and cannot constitute an independent reason to lift the attachment. There are no special circumstances based on which a different decision should be taken. The fact that Vringo does not market any competing goods but only wants to enforce a license fee in any event does not in and of itself constitute a reason for lifting the attachment. Obtaining a license fee is a real interest for which initially, Vringo is entitled to exercise its patent right. 4.36. For that matter, ZTE can prevent future shipments of similar goods from being affected by an attachment of Vringo by ensuring that it is determined in advance that the goods do not support the patented technology. security 4.37. ZTE starts from the fact that in the most favorable scenario for Vringo, it can only claim payment of a license fee and it offers to furnish security for this. 4.38. This starting point is incorrect. Given that for the present it cannot be assumed that ZTE is genuinely seeking a license, there is no reason why Vringo should not be entitled to invoke its patent right. 4.39. Article 24 (2)(a) APR does not apply in the case at issue because a prejudgment attachment has been levied in the interim with the consent of the interim measures judge, so that the condition under (b) of that article has not been satisfied. 4.40. Article 705 (2) DCCP does not offer any ground for releasing the goods in exchange for furnishing security, either, because the attachment at issue has not been levied for the purpose of recovering a monetary claim. detaining and seizing future shipments 4.41. All the above findings lead to the conclusion that the attachment made will not be lifted at this stage, not even if security is furnished (claims I and VI). 4.42. To the extent that ZTE wants to have guarantees for the future (claims II, III, IV and VII), the claims must be rejected to the extent that these pertain to goods that are similar to the UMTS goods. The same is true in as far as the claims pertain to LTE goods. Given that Vringo already released the detained LTE goods on 17 June 2014 following a request to this effect of 4 June 2014 from ZTE and no further LTE goods have subsequently been detained, ZTE has insufficient interest in the extensive relief claimed under II, III, IV and VII. conclusion

C/09/470109 / KG ZA 14-870 22 24 October 2014 4.43. As the party ruled against, ZTE will be ordered to pay the costs of the proceedings. 4.44. The parties agreed that the costs of the proceedings of each party must be estimated at € 200,000,-- 4.45. In accordance with the claim, the order to pay the costs of the proceedings will be declared provisionally enforceable. 5. The decision The interim measures judge: 5.1. rejects the claims; 5.2. orders ZTE to pay the costs of the proceedings, to date on the part of Vringo estimated at € 200,000,--; 5.3. declares this order to pay the costs of the proceedings provisionally enforceable. This judgment was rendered by mr. P.G.J. de Heij and declared in public by mr. J.Th. van Walderveen on 24 October 2014 in the presence of the court clerk.